Innovation islands: what Ireland and Taiwan can learn from each other

At first glance, Ireland and Taiwan might not seem to have much in common. But both are small island states that have what might be diplomatically described as "difficult" relationships with their overbearing neighbours.

While Ireland and Britain are currently at barely polite loggerheads over Brexit, Taiwan is locked in a situation where China considers it as little more than a wayward province. The world's second-largest economy has never renounced the use of force to bring the island under its control. Because of this, Taiwan, like Ireland, has often defined itself in opposition to its enemy.

Another thing both share is their ability to punch above their weight on the world stage. Each is hugely important in the technology sector. Ireland is home to almost every tech company you can name, while its Asian counterpart plays a critical role in the hardware space.

Indeed, Taiwan is so central to the global tech supply chain that the island estimates it produces most of the world’s laptops, semiconductors and peripherals. Not bad for a place that is half the size of Ireland, albeit with a population of 23 million. The state has become a major exporter. Since 1985, the proportion of high-tech goods shipped has grown from just 18.8 per cent to 52.2 per cent in 2014, helping to make Taiwan Asia’s fifth-largest economy.

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It's home to a number of well-known indigenous tech firms such as mobile manufacturer HTC, which recently sold its smartphone team to Google.

However, most of the biggest companies on the island, such as Hon Hai Precision Industry – better known to the world as Apple supplier Foxconn – started out as original equipment manufacturers (OEMs). Few progressed beyond manufacturing products on behalf of others.

Cash cow

And Taiwan’s traditional strength now threatens its future. It is struggling to make the move away from traditional IT manufacturing towards newer technologies such as the Internet of Things (IoT) and artificial intelligence (AI).

Manufacturing may not be as economically viable as it once was, but there are still plenty of jobs working for the likes of Foxconn and its rivals. That is standing in the way of developing a culture of innovation.

“The spirit of entrepreneurship is weak in Taiwan,” said Mei-Li Hsiao, director general of the Institute for Information Industry, who spent many years in Silicon Valley. “Students like the idea of working for stable companies and so are often reluctant to take the sort of risks that are associated with starting your own business.”

Additional problems include having a small domestic market, a brain drain that has seen more than one million Taiwanese move to mainland China and, quite simply, a lack of ambition.

With Taiwan looking to establish itself as an Asian Silicon Valley, the government has been trying to foster a better sense of entrepreneurship by creating more than 160 innovation centres in recent years. A move is on, in tandem, to wean more indigenous firms from hardware.

“We are trying to get more companies to focus on the software side of things – to explore IoT and other digital applications – but it is a hard process to transfer over from hardware because most of our enterprises are used to resource-intensive production,” Dr Jiunn-Rong Chiou, deputy minister at the island’s National Development Council. “We face a painful period of redevelopment because people are not used to change and stick to yesterday.”

The Taiwanese have been paying close attention to the development of a thriving tech ecosystem here in Ireland and are impressed by what they see. While we may see plenty of flaws in our attempts to boost entrepreneurship locally, they see a country going all out to support entrepreneurs and to embrace future technologies.

Ireland can learn from Taiwan as well. Take the appointment of Audrey Tang, a transgender, anarchist software hacker, as digital minister last year. Ms Tang makes no secret of her attempts to "hack" the system in order to turn civic society into a more equal place in which truly open government is the order of the day. Contrast this with Ireland's very defensive Freedom of Information regime.

It was recently suggested that Ireland should consider appointing a technology ambassador to sell Ireland in Silicon Valley. But perhaps the appointment of a digital minister, with as much freedom as Ms Tang has, might serve us better.

The hacker who is adding a different flavour to politics in Taiwan, page 6